Hana Securities on the 17th assessed SK Telecom as having the highest investment safety among the three telecom companies. It set a target price of 70,000 won and gave a "buy" recommendation.
As hacking incidents involving the three telecom companies spread, SK Telecom was judged to have largely reflected the risk in its share price already, making further downside risk limited. Also, with a third-quarter earnings decline already anticipated, there is a strong possibility that market expectations (consensus) will be revised upward later. Considering several factors such as a high dividend yield and high earnings expectations for next year, the stock is seen as having significant relative upside potential.
Kim Hong-sik, a researcher at Hana Securities, said, "Until early Oct., short-term share price weakness may appear due to the burden of an operating loss in the third quarter," and added, "From mid-Oct., the stock looks likely to take a step up based on the outlook for the fourth quarter and the full year next year."
The hacking crisis at competitors is expected to be prolonged. The National Assembly plans to hold a hacking hearing this week and discuss the schedule, and consumer groups are demanding compensation. This year's parliamentary audit is expected to focus mainly on telecom hacking issues.
Kim said, "While interest in telecom stocks may grow on expectations for the separate taxation of dividends, the hacking issue makes it burdensome for investors to buy," adding, "By contrast, SK Telecom, which has already implemented a business suspension, been hit with a penalty surcharge, and rolled out its own compensation plan, could be an alternative."